Live Stock Ins. Ass'n of Huntington v. Stickler

• Decision Date: 03 April 1917
• Docket Number: No. 9270.,9270.
• Parties: LIVE STOCK INS. ASS'N OF HUNTINGTON, WABASH AND WHITLEY COUNTIES v. STICKLER.
• Court: Indiana Appellate Court

64 Ind.App. 191

115 N.E. 691

LIVE STOCK INS. ASS'N OF HUNTINGTON, WABASH AND WHITLEY COUNTIES

v.STICKLER.

No. 9270.

Appellate Court of Indiana, Division No. 1.

April 3, 1917.

Appeal from Circuit Court, Huntington County; Samuel E. Cook, Judge.

Action by Harry O. Stickler against the Live Stock Insurance Association of Huntington, Wabash and Whitley Counties. Judgment for plaintiff, and defendant appeals. Reversed and remanded, with instructions.

George M. Eberhart and Sumner Kenner, both of Huntington, for appellant. W. A. Branyan and Wilbur E. Branyan, both of Huntington, for appellee.

FELT, C. J.

This is a suit by appellee against appellant on an alleged contract of insurance upon a horse belonging to appellee. Issues were formed by a complaint in one paragraph and an answer of general denial. The case was tried by the court, and on request a special finding of facts was made, on which the court stated conclusions of law in favor of appellees. Appellant's motion for a new trial was overruled and judgment rendered in appellee's favor for $200, from which appellant appealed and has assigned as errors the following: (1) Overruling appellant's demurrer to the complaint; (2) error in each conclusion of law stated on the special finding of facts; (3) overruling appellant's motion for a new trial.

The complaint alleges in substance: That on and prior to June 8, 1914, appellant was duly incorporated under the laws of the state of Indiana to insure live stock against death, and was then operating in the counties of Huntington, Wabash, and Whitley. That one John Brahm was a duly authorized agent of appellant. That the company operated under a mutual plan by which a person became a member by making an application and paying the requisite fee. That on the date aforesaid appellee was solicited by said agent to insure two horses in said company, one of which was a black stallion called “Nigger.” That appellee made application for $200 insurance on said horse and paid to said agent the sum of $4, $2 of which was the premium for the insurance on said stallion. That the agent took the application, accepted the money, and turned all over to the association at its home office in Huntington, Ind. That on June 8, 1914, the agent issued to appellee a receipt for $4 “in payment for membership fee to the Live Stock Insurance Association of Huntington, Wabash and Whitley counties, Ind.” That thereafter the next meeting of the directors of said company was held at Huntington, Ind., in the first week of July, 1914, at which meeting appellee's application was taken up, and soon thereafter the association reported to appellee “that the application as to the black stallion ‘Nigger’ was not rejected by said association. That said plaintiff believed such report and relied thereon, and, resting under such assurance given to him, assumed that his said stallion was duly insured in said association, and, relying thereon, made no attempt to get further insurance upon said horse.” That appellant continued to hold the money paid to it by appellee until in August, 1914, and still retains the same, and in the meantime the horse died, whereby appellee suffered a loss of more than $200. That he was the owner of said horse on the 8th day of June, 1914, and continued to be the owner to the time of his death. That on August 4, 1914, appellee served a written notice of such loss on appellant, and demanded payment, at its principal office aforesaid, which notice was as follows:

“Huntington, Indiana. August 4, 1914.

To the Live Stock Insurance Association of Huntington, Wabash and Whitley Counties, Ind.:

You are hereby notified that on the 30th day of July, 1914, the black stallion which was insured in your company, viz. ‘Nigger,’ died. The horse was black, and was five years old, and was insured for $200. I present herewith a mortuary certificate containing the names of three witnesses, viz. Burnard Minnick, William Lippencott, Dr. S. D. Bader, also signed by O. H. Lancaster, the veterinary surgeon. I demand payment for the death loss of the horse, viz. $200. If you require any further proof or statement, you will kindly specify what is desired; I will furnish it. H.O. Stickler.”

That appellant has paid no part of said loss, all of which is due. That appellee has done each and everything which it was his duty “to do under his contract in perfecting his insurance.”

The demurrer was for insufficiency of the facts alleged to constitute a cause of action against appellant.

The memoranda is in substance as follows: (1) There are no facts alleged to show that John Brahm was authorized to accept applications for membership in the company. (2) There is no allegation that it was the duty of the company to act on an application for insurance at any designated time after such application was received, or that it held appellee's application an unreasonable time without acting upon it. (3) It is not averred that appellee's application for insurance was accepted or approved by the company, nor are any facts averred which show that it waived such provision. (4) The complaint shows that the application was never accepted by the board of directors of the company. (5) It is not averted that appellee's horse was insured by the company.

[1] The general rule is that an application for insurance constitutes merely a proposition to obtain insurance, and does not become a contract binding on the parties until accepted by the insurance company. Supreme Lodge, etc., v. Graham, 49 Ind. App. 535-537, 97 N. E. 806;Barr v. Ins. Co. of N. Am., 61 Ind. 488-494;Dorman v. Connecticut Fire Ins. Co., 41 Okl. 509, 139 Pac. 262, 51 L. R. A. (N. S.) 873;Allen v. Massachusetts Mut. Acc. Ass'n, 167 Mass. 18, 44 N. E. 1053;Covenant Mut. Benefit Ass'n v. Conway, 10 Ill. App. 348; 25 Cyc. 713.

[2] Unless it is prohibited by statute, or it is stipulated that the insurance shall not take effect until the delivery of the policy, or compliance with some other stipulated conditions, there may be a binding contract of insurance on the acceptance by the company of the application, without the issuance of a policy, but before such is the case in any instance there must be a complete and final agreement by the parties as to all the essential elements of such contract, either by express stipulation or by fair and reasonable intendment from the facts and circumstances of the particular case.

[3] Contracts of insurance may rest in parol where there is no statutory prohibition thereof. Ohio Farmers' Ins. Co. v. Bell, 51 Ind. App. 377, 99 N. E. 812;Barr v. Ins. Co., 61 Ind. 488-494; Supreme Lodge, etc., v. Graham, supra; N. Y. Life Ins. Co. v. Babcock, 104 Ga. 67, 30 S. E. 273, 42 L. R. A. 88, 69 Am. St. Rep. 134; Joyce on Insurance, §§ 43-57; 1 Cooley's Briefs on Insurance, pp. 364, 392, 401, 428; Elliott on Insurance, §§ 29, 31; 25 Cyc. 714-716.

The complaint charges that appellee paid the premium for insurance on the black stallion; that the agent received it and turned the money over to the company, and the company retained it until after the death of the horse on July 30, 1914, and still retains it; that at the meeting of the directors in the first week of July, 1914, appellee's application for insurance was taken up, and soon thereafter appellee was informed “that the application as to the black stallion ‘Nigger’ was not rejected by said association”; that he relied on such representations and believed his horse was insured.

[4] It is essential to a contract of insurance, whether in writing or parol, that the minds of the parties to the contract shall have met upon the essential elements of such contract, viz.: (1) The subject-matter; (2) the risk insured against; (3) the amount; (4) the duration of the risk; (5) the premium. Posey Co. Fire Ass'n v. Hogan, 37 Ind. App. 573, 576, 577, 77 N. E. 670;Ohio Farmers' Ins. Co. v. Bell, 51 Ind. App. 377, 99 N. E. 812; 1 Cooley's Briefs on Insurance, pp. 392-395; 1 May on Insurance, §§ 43, 43f; 1 Joyce on Insurance, §§ 43, 45, 46, 47, 48, 49, 50; Elliott on Insurance, § 31.

The complaint proceeds on the theory of a right to recover on a parol contract of insurance for it is not alleged that the application was accepted in writing, or that any policy or certificate was issued to appellee. There is a general averment in the complaint that appellee did everything necessary to be done on his part to perfect his insurance, but it is not averred that appellant approved his application, but on the contrary it is shown that at the meeting of the board of directors in July his application was taken up, and shortly thereafter he was informed that it had not been rejected. Such information shows that there was no effort to deceive or mislead appellee, and that he was informed of the exact status of his application, viz. that it had been taken up by the board and had not been rejected. The only reasonable inference to be drawn from such facts is that the application was still pending before the board without either approval or rejection. This would not indicate a meeting of the minds of the insurer and the applicant, and would not show a parol to other contract of insurance.

The complaint does not show that it was the duty of the board of directors to act upon appellee's application at any particular time, or that the delay in so doing was unreasonable. The allegations do not show the provisions of the application relating to notice to appellee, the approval or rejection of the application, or the time within which the insurance should take effect. There is no general averment that the application was approved, or that appellant in any way waived such approval or insured the horse, for the death of which a recovery is sought. But it is alleged that appellant received the money paid by appellee, and retained it “until in August, 1914, and retains it.”

The complaint therefore shows that the application was not formally accepted, and seeks to show that by...